Unused credit - does it affect rating

aetbaar

I have a credit card with a £17k limit that has not been used

Is it better to close this or leave it open to show future lenders what credit is available to me and the fact that I have not abused it


Not sure whether having unused credit is a good thing or counts against you when applying for new credit

nonnatus

Not entirely sure of the answer, but I DO know that since clearing all my credit cards, I'm being offered LOADS more credit! So I now have 5 empty cards, totalling around £22,000 possible credit and am bombarded with Pre-approved Loan applications. Latest was from Nationwide this morning.

I would have KILLED to have been offered these loans 3 years ago! Now that I don't want them, I can't escape them

Paully232000

I don't think that you are going to get a definitive answer on this one as some people are of the opinion that having lots of credit available in comparison to your salary hinders attempts to get more credit, and there are those (like me) who do not think that it matters.

The ability to get more credit is up to the individual lender on an unknown set of characteristics. But in general would be based on previous use of credit and how well you used it, salary, time in employment, time at address and on the electoral roll and multiple other aspects of your finances and life that you state on the form and are on your credit file. CCJs, defaults, missed payments, how many CC apps you have made over the months previous.

izools

I think it depends also on they type of credit you're applying for.

Taking out a loan or especially a mortgage the lender could be quite worried and may base your affordability on the assumption you maxed the cards out and only offered what they thought you could afford if you did max them out.

More recent anecdotal evidence however suggests it isn't so much of an issue for credit card applications.

If you were to close the account, would your total credit card debt add up to less than half your then total credit limits? If so, I'd close it. If however, your other card(s) are at over half their limits closing this one might leave you looking stretched.

doublesilver

Apparently lenders will look at all available credit when making a decision - according to refusedcredit.co.uk. So unused credit in one form could compromise the chance of getting credit in another form.

aggypanthus

does anyone know the Scottish law on this, or link to any info?

You-kip

Loads of Available credit looks 100 times better then maxed out cards don't care what anyone says.

fermi

Experian's take on it --> Will lowering our credit card limit affect our credit scores?

(not that I necessarily agree with that, as each lender will use their own criteria)

The_Boss

Oh dear.

As I always say when people start this - lowering my credit card limits and closing unused cards SERIOUSLY affected my ability to get credit for almost two years. It should NOT be a uniform action.

The only way this question can be answered is knowing the OP's salary, other credit card limits and balances and other debts.

izools

The_Boss wrote: »

Oh dear.

As I always say when people start this - lowering my credit card limits and closing unused cards SERIOUSLY affected my ability to get credit for almost two years. It should NOT be a uniform action.

The only way this question can be answered is knowing the OP's salary, other credit card limits and balances and other debts.

You-kip wrote: »

Loads of Available credit looks 100 times better then maxed out cards don't care what anyone says.

Absolutely agree.

As stated, never close down any cards or reduce any limits unless you'll be left with at LEAST 50% unused limits afterwards :cool:

The_Boss

Yep, think You-Kip makes a good point too.